CHICAGO- United Airlines (UA) announced robust financial performance for the third quarter of 2024. The company achieved pre-tax earnings of $1.3 billion, translating to a pre-tax margin of 8.7%. Adjusted pre-tax earnings reached $1.4 billion, with an adjusted pre-tax margin of 9.7%.
Diluted earnings per share hit $2.90, while adjusted diluted earnings per share soared to $3.33, surpassing the company’s initial guidance range of $2.75 to $3.25 for the quarter.
United Third Quarter Earnings
The airline’s financial success was accompanied by strong operational performance. Revenue trends improved as the industry reached a turning point, with unprofitable capacity exiting the market. Domestic unit revenue turned positive year-over-year in August and September.
Demand for United’s products remained strong. Corporate revenues surged 13% year-over-year in September. Premium revenues demonstrated resilience, increasing 5% year-over-year during the quarter. Basic Economy revenue saw a significant 20% year-over-year growth.
United Airlines CEO Scott Kirby praised the company’s team for their efforts in maintaining safety and punctuality during the summer season. He emphasized that the improved revenue trends, which began in mid-August, propelled United to exceed third-quarter expectations.
Kirby expressed optimism about the company’s future, stating that the successful summer of 2024 marks the beginning of a promising period.
He believes that United’s enhanced customer experience, combined with its United Next initiative, positions the airline at the forefront of the industry for the foreseeable future.
United Share Repurchase Program
United Airlines’ Board of Directors has authorized a new share repurchase program, allowing the company to buy back up to $1.5 billion of outstanding common stock and warrants. This program marks the company’s first share repurchase initiative since the suspension of its previous program in 2020 due to the COVID-19 pandemic.
The repurchase plan includes a $500 million limit through the end of 2024 and represents approximately 7% of United’s market capitalization based on the October 14, 2024 closing stock price. The program has no set expiration date and will continue until the company completes all authorized purchases or the Board of Directors suspends or terminates it.
United Airlines CFO Michael Leskinen highlighted the company’s recent investments, stating, “We’ve invested $22 billion in our product and nearly $10 billion in our people over the last four years. These investments have driven higher profits and are now contributing to growing free cash flow.”
Leskinen emphasized that the share repurchase program is part of a broader strategy, saying, “We’re now positioned to add a share repurchase program while continuing to invest in and deleverage our business. We’re targeting net leverage below 2x in the next few years. This buyback is intended to be the start of a consistent and disciplined return of capital, paced by our ability to generate increasing levels of free cash.”
In addition to the new program, United Airlines recently repurchased over 2 million shares of common stock in the open market. This separate action was connected to the exercise of approximately 6.4 million warrants issued to the U.S.
The newly announced $1.5 billion share repurchase program allows United Airlines to repurchase shares through various methods.
Q3 Key Events
United Airlines unveiled a groundbreaking partnership with SpaceX to equip over 1,000 mainline and regional aircraft with Starlink’s Wi-Fi service. This industry-first move promises passengers free, high-speed internet connectivity starting late 2025.
The airline recently revealed its largest-ever international expansion, adding eight new Atlantic and Pacific destinations for summer 2025. These include Ulaanbaatar, Faro, Palermo, Dakar, Bilbao, Madeira Island, Nuuk, and Kaohsiung. United will now operate 800 daily flights to 147 international destinations, surpassing all other U.S. carriers combined in global reach.
Customer satisfaction saw a significant boost, with a 5.4-point increase in Net Promoter Score compared to the previous year. Improvements were noted across key areas such as baggage handling, inflight entertainment, and food and beverage services.
United demonstrated operational excellence in the third quarter, ranking first in on-time departures and second in on-time arrivals among major U.S. airlines. The carrier achieved top performance in on-time departures for August and September.
Emphasizing its commitment to sustainability, United became the pioneer in purchasing sustainable aviation fuel (SAF) at Chicago O’Hare International Airport.
The airline also expanded its regional operations through an agreement with SkyWest. This partnership introduces the CRJ550 to United Express’s fleet, with 11 aircraft set to join in December and potential for future expansion.
Record-Breaking Third Quarter
United Airlines set multiple records in the third quarter of 2024, marking it as the busiest in company history for revenue passenger volumes.
The airline broke its own records for passenger numbers during the July 4 and Labor Day holidays and reached a new daily high of 552,000 passengers in July.
September saw United achieve its highest daily customer average for the month, carrying 474,000 passengers.
The carrier maintained operational excellence, leading on-time departures among major U.S. airlines at six of its seven U.S. hub locations. This performance extended United’s streak to 30 consecutive quarters of leading on-time departures at Chicago O’Hare and 10 quarters at its Denver hub.
United’s completion rate in September hit a year-to-date high, underscoring the airline’s commitment to reliability. The carrier expanded its domestic operations significantly, increasing flights to U.S. and Canadian destinations by 5.2% and 18.5% year-over-year, respectively.
In Europe, United operated its largest-ever schedule, with a particular focus on popular Southern European destinations including Portugal, Spain, Italy, and Greece. The airline also announced its first nonstop flight between New York/Newark and Dominica, set to launch in February pending government approval.
United demonstrated flexibility in meeting customer demand for special events. The carrier added or increased service across 145 flights to accommodate travelers attending the Republican and Democratic National Conventions, college football games nationwide, and Chicago Bears away games, including their international game in London.
The airline expanded its route network, launching or reinstating services from Washington, D.C. to Greenville, S.C.; San Francisco to Detroit, Mich., and St. Louis, Mo.; and adding a new route from San Francisco to Montréal.
United also reinforced its position as the leading U.S. carrier to mainland China, reinstating service between Los Angeles and Shanghai and maintaining the largest mainland China network of any carrier.
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